NEW DELHI, July 8: Power Finance Corporation (PFC) has decided against funding the Rs 240-crore rupee loan requirement of Jindal Tractabel Power Company for its Rs 1,200-crore power project in Karnataka.

Jindal Tractabel is now looking at options and has approached other financial institutions for funding the rupee loan requirement for its 300mw project.

Senior officials told The Financial Express that Power Finance had earlier shortlisted Jindal's project but after a detailed appraisal identified certain grey areas in its proposal. The Power Finance decision is based on the security of the loans given to the company, sources say.

"The company was planning to use part of the power generated for its steel plant, the fate of which is unclear. Moreover, there were other issues in the proposal that did not meet our criteria for funding and so we decided against it", officials said.

Power Finance currently has shortlisted around 21 private sector power projects, and has undertaken a detailed appraisal of these projects. Total cost of these projects is estimated at Rs 6,648 crore with a loan component of Rs 854 crore.

Meanwhile, Power Finance is on the verge of finalising its strategy on funding of power projects. The public sector company is planning to take up those projects, which will generate power in the short run. A cabinet note will shortly be forwarded, sources say.

The identification of projects is based on undertaking rennovation and modernisation of power stations, providing cheap loans to state electricity boards and looking at the existing power plants replete with missing links. Private power companies, which have sent their proposals to the public sector company, are still negotiating on the power purchase agreements with state governments and are awaiting land and environmental clearances. That apart, the fuel linkage approval is awaited, and it will be only after these issues are settled that Power Finance will consider the loan sanction, sources said. It has financed the Rs 1,600-crore project of Shri Maheshwar Hydel Power Corporation project to be set up in Madhya Pradesh with a capacity of 400mw.

Other major private projects being appraised by Power Finance include a Rs 1,469-crore project of GIPCL to be set up in Gujarat with a capacity of 250 mw, two projects of Gujarat State Electricity Corporation Ltd (GSECL) costing respectively Rs 736 crore and Rs 695 crore, a Rs 471-crore multi-fuel gas power plant project of Andhra Power Gas Power Corp, a Rs 300-crore liquid fuel based project of Somdutt Power Ltd in Haryana, among others.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.